By John Richardson EVERY $10 decline in the iron ore price knocks more than $2bn off the annual revenues of Vale, Rio Tinto and BHP Billion and around $250m from those of Anglo American. We can see a similar dynamic playing out in chemicals and polymers markets, but on a scale that has yet to […]
Asian Chemical Connections
China Iron Ore Stocks Can Build 1,200 Empire State Buildings
By John Richardson CHINA’S commodity imports boom was, of course, mainly down to the rise its middle class as hundreds of millions more of its citizens became rich enough to buy a refrigerator, a TV and a car for the first time. Or was it? Daniel De Blocq van Schetlinga, the Hong Kong-based head of […]
China’s Rough Ride To Sustainable Growth
By John Richardson IT makes no sense whatsoever to think that the transition to another type of growth in China will inevitably be so smooth that there is hardly any disruption to the global economy, and, with it, of course, the chemicals industry. The issues facing China are too complex and too myriad for the […]
Australia: Nice Work If You Were Able To Get It
By John Richardson BACK in the late 1990s, the blog held a discussion with an Australian petrochemicals industry executive. He described his country’s approach to free trade, or rather the lack of it, as “to put it politely, naïve, and to put is less politely, plain stupid.” He was referring to how Australia had aggressively […]
China’s September Trade Data Shows Real Direction
By John Richardson EVIDENCE that decoupling might be a myth has grown with the release of China’s September export data. Exports to the ASEAN (Association of Southeast Asian Nations) region fell 9.8% by value in September 2013 compared with the same month in 2012. Part of the explanation for the decline is the “over-invoicing” fiddle […]
Irrationality And Staying Solvency
By John Richardson JOHN Maynard Keynes, the famous economist and speculator , once said “the market can stay irrational longer than you can stay solvent.” In other words, if you are a trader you can sit around for ages waiting for the fundamentals to drive any particular market, and, as a result, go bust – […]
Analyse The Data And Listen To Li Keqiang
By John Richardson IT IS important to look at long-term trends in China rather than be misled by a few positive sets of data. This is not pessimism, just realism. Yesterday saw the release of very good August export data. Exports were up by 7.2% from year earlier, and were 5.1% higher than in July […]
Come On Mr Abbott, Please
By John Richardson TONY Abbott, in his victory speech on Saturday following the Coalition victory in the Australian Federal Election, renewed his pledge to scrap the carbon tax, stop the boat people and bring the budget back into surplus. Come on Mr Abbott, please. The blog has to admit, in this time of nonsensical sound-bite politics, […]
Adjusting Inventories To Lower China Growth
By John Richardson EXCESSIVE inventory building across a range of commodities in China, including petrochemicals, continues to worry the blog. One reason, as we discussed yesterday, might be that traders are in the midst of a liquidity squeeze as a result of the late June credit crackdown. They have therefore taken out further very-aggressive positions […]
China Commodities Rally About Protecting Existing Debt
By John Richardson OVER the last few days we have focused on the increased risk-on trade in commodities, including petrochemicals. But maybe the rallies we have seen in products such as fibre intermediates and polyethylene (PE) are mainly about traders being forced to increase their risk profiles in order to protect existing liquidity. Here is the […]
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